A hard money loan allows the borrower to receive a loan based on the value of real estate he or she owns. The real estate is used as collateral. These loans are issued at a much higher interest rate than conventional loans and are not given by any commercial banks but instead are arranged by private investors.

Since the Hard Money loans are made by private investors a borrower’s credit score is not consider due to the fact that the loan is secured by the value of the property that is being put up as collateral. However, with the current state of the real estate market, hard money loans are not that easy to obtain these days since the real estate market has soften and property is selling for far less than what it was a couple of years ago.

Below are a couple of other non-traditional ways to get financing for your business:

Credit card factoring or Merchant advance for small businesses
Credit card factoring also known as a Merchant advance is when a lender gives your business cash upfront based on your future credit card sales. It is paid back by using a percentage of those future credit card sales until the balance is paid in full. The actual amount that the borrower can receive is based upon the business’s monthly credit card receipts.

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Hard Money Loans have long been the standard financing for real estate investors and businesspersons to acquire quick short term project funding. Even though this type of financing is expensive in terms of interest rates when compared to conventional financing, the terms and speed of the transaction made it viable for quick turnaround situations such as “flipping” properties or purchasing raw materials.

There have been two important changes to the accessibility of hard money loans since the economic crash of 2008. One change is the tightening of credit restrictions by all kinds of lenders, on the borrower. In the past some real estate investors who were seeking hard money would often have had a recent bankruptcy or had received a Notice of Default and were still able to acquire the necessary financing. If this is your situation now, the prospect of acquiring the financing is considerably less.

The other change is a reduction in loan-to-value (LTV). Many lenders were comfortable with LTV in the 70 -75% range and going to 80% on especially lucrative deals. Most lenders have gone back to a more conservative 60 – 65% LTV.

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An automatic garage door is a must for any modern home. If you don’t have a door that automatically opens, the only alternative is manually opening your garage door every time you want to store your car. Or else you have to park you car on the street, thus leaving it vulnerable to the elements and possibly even theft. But if you want to install a new garage door, or even simply replace the system that you already have, it can sometimes be difficult to get the money you need, particularly if there are a few negative marks on your credit. But so long as you own your home, you probably won’t have much trouble getting financing if you seek out a hard money loan.

A private money loan functions a lot differently from a lot of bank loans, mostly because they are asset based. This means that they are based upon your current assets, and therefore rely less heavily on your credit report. Private party lenders are able to do this because they are not obligated to adhere to the kind of underwriting guidelines that can make the approval process for a bank loan more frustrating.

If you are considering purchasing a garage door with the help of hard money loans, keep these tips in mind.

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